Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link. Trade-Ideas LLC identified PACCAR ( PCAR) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified PACCAR as such a stock due to the following factors:
- PCAR has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $104.6 million.
- PCAR has traded 346,821 shares today.
- PCAR traded in a range 203.3% of the normal price range with a price range of $2.38.
- PCAR traded below its daily resistance level (quality: 60 days, meaning that the stock is crossing a resistance level set by the last 60 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).
Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower. EXCLUSIVE OFFER: Get the inside scoop on opportunities in PCAR with the Ticky from Trade-Ideas. See the FREE profile for PCAR NOW at Trade-Ideas More details on PCAR: PACCAR Inc, together with its subsidiaries, designs, manufactures, and distributes light, medium, and heavy-duty trucks and related aftermarket parts worldwide. The stock currently has a dividend yield of 1.4%. PCAR has a PE ratio of 18.7. Currently there are 4 analysts that rate PACCAR a buy, no analysts rate it a sell, and 12 rate it a hold. The average volume for PACCAR has been 1.3 million shares per day over the past 30 days. PACCAR has a market cap of $20.3 billion and is part of the consumer goods sector and automotive industry. The stock has a beta of 1.67 and a short float of 2.4% with 4.29 days to cover. Shares are down 2.9% year-to-date as of the close of trading on Friday. STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. TheStreetRatings.com Analysis: TheStreet Quant Ratings rates PACCAR as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, increase in stock price during the past year, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated. Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 19.1%. Since the same quarter one year prior, revenues rose by 12.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- PACCAR INC has improved earnings per share by 31.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, PACCAR INC increased its bottom line by earning $3.12 versus $2.86 in the prior year. This year, the market expects an improvement in earnings ($3.29 versus $3.12).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Machinery industry average. The net income increased by 32.4% when compared to the same quarter one year prior, rising from $233.60 million to $309.40 million.
- Net operating cash flow has increased to $547.70 million or 15.89% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -0.76%.
- You can view the full PACCAR Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.